Why the Manafort verdict should worry Trump

Perhaps President Trump is right, and it’s not about collusion at all.

But that doesn’t mean he has nothing to worry about.

Special prosecutor Robert Mueller notched a prominent win on Tuesday with a guilty verdict on eight of 18 charges in the trial of Paul Manafort, who spent five months with Trump’s 2016 presidential campaign, including two months as chairman. While the jury deadlocked on 10 counts, it found Manafort guilty of five tax-evasion charges, two bank-fraud charges, and one charge of failing to register a foreign bank account. Jail time could total as much as 80 years.

Trump must wonder whether his business dealings could survive the type of forensic analysis Mueller’s team was able to perform on Manafort’s operation.

A lone protester holds up a sign and American flag outside the Albert V. Bryan United States Courthouse after former Trump campaign chairman Paul Manafort was found guilty on eight counts of fraud August 21, 2018 in Alexandria, Virginia.

Manafort earned as much as $65 million as a consultant for foreign politicians from 2006 to 2015, parking most of the money in overseas accounts to avoid paying U.S. taxes on it. He never registered as a foreign lobbyist even though he represented foreign interests in Washington. And when Manafort’s foreign income began to run dry in 2014, he obtained millions of dollars in loans by misleading banks about his assets and finances while also holding out the prospect of plum jobs in the Trump administration in exchange for favorable treatment from lenders.

Trump never operated as a foreign consultant, and there’s no reason to think he shielded foreign income in offshore accounts the way Manafort did. But other aspects of the Manafort investigation get closer to the type of business Trump did as chairman of the Trump Organization. As a real-estate developer with projects in at least a dozen countries, Trump had business relationships with a variety of Russians — involving millions of dollars’ worth of deals — at a minimum.

And now that Mueller is cracking open private business arrangements that were once hidden from public view, Trump may fear that his own business secrets are vulnerable, too.

Recall that in July 2017, the New York Times asked President Trump: If “Mueller was looking at your finances and your family finances, unrelated to Russia — is that a red line?”

Trump responded: “I would say yeah. I would say yes. By the way, … I sell a lot of condo units, and somebody from Russia buys a condo, who knows? I don’t make money from Russia.”

FILE PHOTO: U.S. President Donald Trump and Russian President Vladimir Putin hold a joint news conference after their meeting in Helsinki, July 16, 2018. REUTERS/Grigory Dukor/File Photo

Russia connections

For starters, there’s the Florida estate Trump bought out of bankruptcy in 2004 for $41 million and resold four years later to Russian billionaire Dmitry Rybolovlev for $95 million. It’s possible Trump improved the property enough to justify the 132% markup, or sold at the peak of a real-estate bubble to a buyer who overpaid. But it’s also possible there’s more to the story and the Russian oligarch got something else from Trump, in addition to a moldy, oceanfront spread.

For years Trump wanted to build one of his signature, namesake towers in Moscow. By 2014, he was getting close, having made contacts with a variety of Russians who might help gain government approvals and provide financing. The prospect of Trump Tower Moscow died when Russia annexed Crimea and invaded Ukraine. Europe and the United States responded by imposing sanctions in 2014, which made Trump’s project impossible. Still, those Russian contacts may have helped Trump finance other deals and funneled Russian buyers to key Trump properties.

In the Manafort case, prosecutors detailed the way Trump’s former campaign manager used various properties to launder tax-free earnings from accounts in Cyprus, the Grenadines, and other offshore locations. Trump’s business is different from Manafort’s consulting operation, but there’s one commonality: real estate, which is a well-known way to launder ill-gotten money.

There are several known connections between Trump the developer and Russian interests that involved financial transactions. After a spate of business bankruptcies, Trump had trouble getting loans from conventional banks. But a shady Russian-born businessman named Felix Sater has helped Trump get financing for a number of projects.

Then there’s Aras Agalarov, a Moscow construction billionaire close to Russian president Vladimir Putin, who has described himself as a friend and business associate of Trump. And as early as 2008, Trump’s son Donald, Jr. described the Trump Organization’s connection to Russian interests this way: “Russians make up a pretty disproportionate cross-section of a lot of our assets. . . . We see a lot of money pouring in from Russia.”

Digging deeper on Trump

There’s nothing wrong or illegal about doing business with Russians (or with most foreign interests). But there would be a problem if Trump got sweetheart deals on unconventional loans emanating from Russia because Russia’s financial sector is essentially controlled by Putin. And that could help explain Trump’s apparent soft spot for a dictator most national security experts consider a threat to the United States.

Much of the coverage of Mueller’s investigation into Trump’s Russian connections has focused on meetings between Trump officials and Russians during the campaign. But Mueller is almost certainly digging much deeper than that.

“If you want to understand what happened at these meetings, you have to understand these business relationships,” Yahoo News’ Michael Isikoff, author of a new book on the Trump-Russia connection, told Yahoo Finance earlier this year.

The Trump Organization was a privately owned company that didn’t have to report financial information publicly. And Trump, of course, has never released his tax returns. So there’s very little public information available to analyze Trump’s financial connections — or those of his company.

FILE PHOTO: Michael Cohen, attorney for The Trump Organization, arrives at Trump Tower in New York City, U.S. January 17, 2017. REUTERS/Stephanie Keith/File Photo

That won’t stop Mueller, who has subpoena power. In the Manafort case, Mueller’s team tracked financial transactions among a web of companies including 17 domestic entities, 13 based in Cyprus, two based in the Grenadines, and one based in the United Kingdom. The indictment alone itemized more than 200 transactions, with dollar amounts, in which Manafort wired money from overseas accounts to American vendors providing Manafort things such as clothing, antique rugs, landscaping services, antiques, and automobiles.

Mueller’s team had some key inside assistance: Rick Gates, Manafort’s former right-hand man, who turned on his former boss and detailed how Manafort committed his crimes in exchange for favorable sentencing for his own crimes. Trump now faces a similar turncoat in Michael Cohen, his former lawyer and fixer, who pleaded guilty to eight criminal charges on the same afternoon that the Manafort jury delivered its guilty verdicts. Six of those charges didn’t involve Trump, but two involved hush-money payments Cohen says were directed by Trump in the late days of the 2016 campaign. Prosecutors could get other information damaging to Trump from Cohen.

It doesn’t have to be collusion to cause Trump enormous problems — and perhaps even threaten his presidency.